Senate passes health care finance bill

Measure to cover more uninsured, cut deficit faces veto

A health care finance bill that trims Minnesota's current budget deficit by as much as $114 million, preserves MinnesotaCare and covers more of the state's uninsured gained Senate approval Wednesday night despite the threat of a governor's veto.

DFL leaders called the bill, which passed 42-19, a sound approach in difficult financial times, because it maximizes federal matching health care funds to the state and secures new health benefits for thousands of poor adults covered by the state's ill-fated General Assistance Medical Care program.

"This is a good bill," said Sen. Linda Berglin, DFL-Minneapolis. "It brings in federal money — federal money that we know is available today to help us balance our budget, federal money that other states have already taken advantage of to help balance their budgets.

The vote — following Tuesday's favorable House vote of a similar bill — defied the unambiguous veto threat from Gov. Tim Pawlenty. Among his concerns was yet another fix to GAMC — despite one already being passed into law — and a proposed surcharge on HMOs, hospitals and nursing homes to pay for the expanded insurance coverage and health care changes.

"Let me be clear," he wrote Tuesday to Senate and House authors, "your omnibus bills if passed in their current forms will be vetoed."

The Senate bill would save money by eliminating GAMC over time and enrolling its recipients in expanded Medicaid services made available through federal health reform.

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Berglin said this would take people whose medical care was fully funded by the state and put them in a program that is covered 50-50 by the state and federal governments. Other uninsured Minnesotans could also qualify.

Pawlenty countered that this "vast expansion" of Medicaid (or Medical Assistance) would increase spending at a time when the state can ill afford it.

The omnibus funding bill includes incentives to reduce expensive ER visits and to create accountable care organizations that accept the financial risk and potential reward of improving the health of their patients. It cuts rates for managed care plans, physicians and assisted-living facilities. It reduces the number of elderly and disabled Minnesotans who qualify for "waivers" that fund home-based care.

The bill also delays or overturns the Pawlenty administration's proposed closure of state-operated mental health facilities and the associated job cuts.

GAMC has been the zombie of political issues this session. Pawlenty cut GAMC last session in his controversial unallotments, which the Supreme Court ruled Wednesday were beyond his authority. He later proposed to transfer GAMC recipients — whose high rates of depression, diabetes and chronic illness make them expensive — to MinnesotaCare.

DFL lawmaker resisted, fearing high-cost GAMC patients would overwhelm the state's MinnesotaCare budget and receive much less care under the program's leaner benefit package. They eventually voted — with Pawlenty's support — to save an amended GAMC by paying lump sums to hospitals to manage the care of its recipients.

The issue resurfaced when key hospitals, including Hennepin County Medical Center, refused to participate. While Pawlenty wants the deal to stand, DFL lawmakers didn't see the point if hospitals couldn't afford it and dropped out.

The Minnesota Council of Health Plans opposed the plan in the bill to reduce the deficit through surcharges on HMOs. While the surcharges would be offset by increased federal dollars, some health insurers in the state with larger HMO products would still lose.

The Senate spent hours Wednesday night considering and defeating amendments, particularly Republican amendments to limit abortion. Proposals to specifically cut state reimbursements for abortions and to ban funding for abortions that are based on the sex of fetuses never even received votes.

The bill passed 42-19 in the form Pawlenty opposed. His threatened veto won't happen, though, until House and Senate leaders resolve differences in their bills through a conference committee. The bills propose different levels of cuts and claim different amounts of federal matching funds.

Berglin and other DFL lawmakers had already scheduled a news conference for this morning to discuss Pawlenty's looming veto.